The Commission for the Protection of Competition (CPC) announced on Thursday it has launched a probe into practices distorting competition relating to the acquisition of ExxonMobil’s share capital by rivals Petrolina.

ExxonMobil’s share capital was acquired via Med Energywise Ltd, a subsidiary of Petrolina. Notification of the transaction had been posted in March this year.

The CPC said the transaction “raises doubts as to its compatibility with the functioning of competition, given it is likely to affect the sales of petroleum products both horizontally and vertically”.

Horizontal competition involves firms at the same stage of the supply chain competing with each other (two competing retailers), while vertical competition occurs between firms at different stages of the supply chain (for example, a manufacturer and a retailer).

According to the CPC, high concentrations in petroleum import and sales markets, as well as the direct competitive proximity between Petrolina and ExxonMobil, “raise the likelihood of price increases and market coordination”.

Also, in relation to retail sales, the concentration could restrict competition on a local level, especially within a range of 4km around petrol stations operated by the two companies.

Petrolina is active in the import, storage and trade of fuels and lubricants under the brands ‘Petrolina’, ‘Agip’ and ‘ENI’ through its network of petrol stations throughout Cyprus. In addition, it operates its own terminal in the Vasiliko area, for the storage of liquid fuels. Petrolina sells petroleum products, liquefied petroleum gas (LPG) and lubricants in the Cyprus market through its petrol stations to commercial customers and other petroleum companies in Cyprus and Greece.

ExxonMobil operates in the import and distribution of fuels through its network of petrol stations under the brand name ‘Esso’. ExxonMobil specifically operates in the distribution of the following petroleum products: 95 octane unleaded gasoline, 98 octane unleaded gasoline, agricultural diesel, heating oil, low-sulfur diesel, kerosene and marine fuels.